Earnings Call: Q3 2019

Nov 6, 2019

Good morning, ladies and gentlemen. Welcome to TIM Participa's 2019 Third Quarter Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in a listen only mode during the company's presentation. There will be a replay for this call on the company's website. After 13 participants' remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given. We highlight that statements that may be made regarding the prospect's projections and goals of TIM Participa's points constitutes the beliefs and assumptions of the company's Board of Executive Officer. Future considerations are not performance or warranties. The involve risks, uncertainties and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors team participants may affect their performance and lead to different results than those planned. Should any participants Now I'll turn the conference over to the CEO, Mr. Pietro Abriola, so he can present the main message for the third quarter of 2019. Please, Mr. Pietro, you may proceed. Good morning, everyone, and thanks I think Nothing our business processes in order to adapt to reality while maintaining a policy. See, during this process. I will walk you through the main highlights of third quarter, and then the team will like to answer your questions. In the third quarter, we were able to post solid results, maintaining our consistency across the board. Service revenue continued to show an acceleration in growth, reaching 3% year on year versus 2.4% of the last quarter. We still have a lot of work to do in this month, but this encouraging trend together with the positive seasonality of the fourth quarter keep us confident on reaching our annual guidance for service revenue. We continue to perform very well on the cost side. Down 0.6% versus 3rd quarter of the last year, which combined with better revenues led to an acceleration in allowing EBITDA margin to expand to 39.6, another record for our company. EBITDA minus CapEx reached close to R800 $1,000,000 during the quarter, which means a growth of 7% year on year. The reduction of a similar amount on the net financial position in the last 12 months is once again showing our strong cash generation. Even after the interest on capital payments. So as you see, we are preparing the company to be ready for a more dynamic industry debt will have in the near future. As we stated before, TIM wants to be a protagonist in the evolution of the Brazilian telecom market. Just generation mobile revenues we are showing today from 1.9 in second quarter to 2.8 in the third quarter, is being supported by our new approach to the market. Revenues for prepaid segment continue to improve while postpaid is performing well, but it still needs some fine tuning to reaccelerate, and we will do that we will complete. Our mobile ARPU increased by roughly 6% year over year, which includes to R24 dollars, not only by the better mix on customer base, but also by improvement in both segments. Compared to the third quarter of last year, postpaid ARPU grew 1% and prepaid ARPU was up 4%. Prepaid improvements, the expectation that Tim implemented in the beginning of the year. Today, King Price operates at 50% of our 350. And it's positively contributing to revenues customer experience and branding. On the revenue side, deducting, along with less competitive pressure, at some time, at market recovery, are pushing rechargers level back to positive after years of sequential 17% considering data penetration as a significant opportunity since more than 40% of our clients still do not use data. TimberTalk, as I said, is also positively contributing to a better customer experience and brand recognition. The simplification of adding service packages, directing to the recharger, built by reduced demand in our call center, which contribute to our customer satisfaction and to bring additional efficiency. All this led us back to be the first in top of mind of prepaid clients. In the postpaid segment, it's important to realize that despite the negative net adds of recent months, we are still capable of adding a compelling offer to capture customers as our growth should. The trend in the last 12 months is positively, growing more than 9% year on year. We are also solving this related to the involuntary churn of delinquent customer. We are also solving return of an in point customer. We are running above the average over a year ago, which some pigs relate system issue and the former commercial approach. But finally, we are seeing indicators improving. Pimblackfamilia which was launched last quarter is getting more traction and today represents out of our pure postpaid acquisition. The Entertainment Top concept in addition to contributing to acquisition is promoting brand recognition and innovation. This together with a more consistent communication advertising, both us back to the 2nd place in top of mind of postpaid. This will be our future platform to deliver content, software and data services. Because it's another area we are working. We're using devices. In order to offer upgrades in customer plans and second, customer engagement. This tactical move is still in the early stages. But we expect that the device business will continue to drive data adoption and service revenue growth without having to change our low subsidies policy. In sum, we are seeing some improvements in the mobile segment. Competition is not so harsh as it was in the first half, microenvironment is showing this small evolution, and our operation is on track and focused on what matters. With this, we expect another period of solid progress in our results for the fourth quarter. As I said before, consistency is our priority. We are doing things step by step to ensure that we deliver on our promises with quality. In the Pictures segment, TIM Live has been a highlight of our results for quite a while. Once again, causing a very solid pace while catching up with our FTTH rollout. Revenue grew up more than 50% year on year, was once again driven by a combination of high single digit ARPU expansion and a solid double digit customer base increase. In Life's customer base reached close to 540,000 clients, almost 50% in RTT. In TIM Live's region, we were the only large player to post positive assets in the first quarter. During the third quarter, we entered 3 new cities, being one of them received 1 of the largest capsule of the northeast. Still reach 1,900,000 households covered with fiber technology. And until the end of the year, our FTTH network recovery plan will be completed, which will put us in a condition to add 16 more cities until 2020. Investment in TIM Live represented almost 10% of the overall CapEx in the 9 month of 2019. FTTH network is just a part of our infrastructure strategy. Our mass CapEx approach is being applied to all fronts to ensure a level customer experience, that will open up monetization opportunities on mobile development. This is an important initiative I'd like to share with you. Still on the fiber side, FTTH coverage, as I mentioned before, is accelerating. We're covering to end up times more outsold than a year ago. We are also expanding our transport network. In the past 12 months, we have increased backbone and of fiber by more than 10%. For the mobile network, our 4G coverage continued to expand driven by 700 Megahertz rollout with more than 40% growth in cities covered with these frequencies. 4.5G coverage is also accelerating, 70% growing the city with carrier aggregation and the leadership in the state of the Northeast and south of the country. Where we are delivered. We continue with our spectrum refarming project at the same time as we reach 3000 Cities with Baltic. We are also implementing new initiatives. Our net spend internet of IoT network reached 3000 Cities and is the largest in the country. We expect this to be a differentiator in the business. We are pushing forward with the implementation of maximum in 4G. As we commented in recent months, this technique can boost capacity by 2 to 3 times. The MOU with this or network sharing was renewed. Discussion are going well and we expect revenues on the outcome of this negotiation in the coming months. As we develop our infrastructure, improve customer experience and satisfaction, we continue to prepare for the future. Our journey to 5G starting more than a year ago, and we keep going forward to be a key player for this evolution in Brazil. Our net of operation fast with small data center for content and network virtualization being deployed. 5G rate equipment being sold to its immigration. At the same time, we continue with our real network test on 3 different locations with 3 different vendors. Preparing the best to engage customers and present to them the benefit of the technology. More than thanks to will be surprised with 5G equipment and devices so clients can experience different application of this new technology. Among these different applications such as IOTs, Mercedes and others, it is worth mentioning that we believe that one of the main use case to benefit the Brazilian population will be the ultrafastest in their own using fixed withdrawal access solution. This should represent a very interesting opportunity for the market and especially for team in the coming years. As you will know, we are as focused in accelerating revenue growth as we are in improving quality and being an efficient company. That is why we see developments in our IT platform with the same importance as our network. The digital transformation we are implementing will only be achieved by changing our processes and introducing new ways to better serve our customers. For example, implemented the Naked SIM platform that allows team to sell any type of plan on any type of channel during all the network provision in real time. In addition, We are working on a next best section approach to better customized offer to cluster of our customer base. The next 2 key deliverables would be car and artificial intelligence customer care. Both projects are expected to significantly improve the quality of our caring services and to be an important driver of further efficiencies. As you have been following the recent quarters, we are monitoring the evolution of our digital transformation program on four fronts. Terry, billing and payment, acquisition of clients, and prepare recharges. In all of them, we are delivering changes that empower customer that's closest to our 3 S goals: self caring, self feeding and self provisioning. With the contribution of this and other traditional initiatives, we are capturing efficiencies at a strong pace. From our efficient plan of BRL1.2 billion between 20172021, which reached BRL461 million by quarter 2019. This contributed to normalized OpEx decrease of 0.6% in the quarter and 0.2% in the 9 month of the year. Well below the inflation. These solid results on costs could be even better if it wasn't for the bad debt. Normalized OpEx with the exception of bad debt will have decreased 2.5% year on year. We like to look on the bright side of things. Once we've completed our action, these initiatives will become an selling opportunity to further improve our EBITDA and margin. A quick update on the initiatives we are implementing. On the credit front, we had partially implemented the new credit model. In order for this new model to work, we are using new internal and external databases which provides a better ability to understand customer behavior. Regarding systems' ability and performance. As we commented earlier in the year, we had some issue during this upgrade that negatively impacted involuntary debt. These problems are behind us, but the evolution of our spending system is an ongoing effort. In inspection, we are already seeing some results. The new approach and challenges that are using are increasing our recovery rates, but we need to improve further to meet our expectation. All in all, we are confident of showing the hyper trend for delinquency in the fourth quarter, twenty nineteen, and in 2020. The acceleration of revenue with strong cost control drove EBITDA growth to almost 7% confirming the improvement trend present in the 2nd quarter maintained. And with margin expansion of 170 basis points to another record of 59.6. The long term trend of our margin clearly show things commitment to be a very efficient operator. Also on the bottom line, the result was strong. Since in the third quarter, we posted from a large net income of 619,000,000. An increase of more than 60% year on year. In the 9 month, 2019, the growth was 34%. EBITDA minus CapEx increased 7% year on year to reach 18% of total revenues leading normalized free operating cash flow to R1.1 billion dollars in the quarter. Our shareholder remuneration following the 2 interest on equity announcement during the quarter as BRL 753 1,000,000, which puts us on track to meet our guidance of approximately 1,000,000,000 for the year. In conclusion, we delivered a solid quarter confirming we are regaining momentum and are still in a position to deliver on our 2019 promises. We were able to reload our operation with a focus on the basic. Value rather than volume, quality, innovation, branding, and last but not least, customer satisfaction. For that, 2020 already began. Our updated plan that should come out in the year We provide more details on the initiative we have already started to develop, to develop such as mobile advertising business, which has already closed financial services, taking advantage of team's assets, 5G preparation and development of more IoT verticals. Thank you, Mr. Pietro. Now we will begin the question and answer session. First, we will take questions from analysts followed by the journalists both in English. We ask each participant to restrict himself to two questions at a time Please hold on while we gather the Our first question comes from Good morning, everyone, and thanks for the call. I have two questions here. I mean, the first one is related to the mobile service I mean, just trying to get a better understanding of this line orders. I know it has been increasing, showing very solid on this quarter, you know, 55% year over year. We're just trying to get the understanding potential for this line to continue to grow. And, and also the, a little bit of the rationale for strong growth in the last part. So this will be my first one. And then my second one related to the PDV, I mean, continues to grow. I think PPA already mentioned that in his previous speech. But then, I mean, our understanding here is that on the second half, should start to see some improvement. Of course, on the 30 Q, the number continued to grow. So just trying to understand what is new initiatives you mentioned you're implementing now are different from the previous ones? And also what would be an improvement here? An improvement would be a slower growth or are relevant with the reduction. I'm not even giving guidance for this line, but I mean, if you just guide us here, this would be great. Thank you. Thank you, Fred. Related to mobile revenues, as we stated, As we stated also in the last call for the second quarter, we are accelerating both on mobile service revenue was both on other revenues, which claimed that other revenues is a part of our business and in a market where the backbone construction is part of our strategy and is one of the key elements. The possibility to get in a faster way and more efficient way to develop is part of our business. So we think that this line will continue to have this kind of pace because it's part of our business, you know, better than me that in the market, there is a good demand for back on transport to construction. And so we think that we continue with the approach that I repeat is faster and it's more efficient that build our own network. We need to build that PDDs, then I'll then connect you more. For sure, it clear that we are slightly late with what we told in the beginning of the year. But the thing that if you look at the absolute value, from the second quarter to the 3rd quarter, we have a deceleration in terms of growth rate and the difference is very small. But as we stated, we foresee a 4th quarter that we see a stabilization quarter on quarter or perhaps a slight reduction compared to the result of this quarter. The initiatives that we put in place that we described are already showing in the number of October, good results. But I need to speak to Arjan to give some more course on these activities. Yes. Hi, Seth. Also regarding the first question about this other line in terms of revenues and regrowth in terms of trust. It's also related to the evolution of our OpEx because if you see Also this quarter we posted a negative number in terms of the dilution of cost on the lease But from our view, it's much more efficient to make shops rather than at the end, if you're doing the swap, your EBITDA will be neutral. Having the lead lines will be negative. So This is something that we've been working a lot. You see and you've seen in the presentation the evolution of the high speed connection of our sites that we are having. So, it's always related to the business. So you should expect a similar trend probably not in terms of growth, but yet in terms of in nominal time. Going to the second question related to the delinquency, clearly something that for us still a challenge, we stated this right at the beginning of this year. It's both coming from some external issues, but also some internal issues. We've been working a lot this quarter. The thing is the PDD reflect what happened probably in mainly 6 or 7 months ago because with the new standards or IFRS 9, the higher impact on the PDV comes from the issues of 6 months ago. So We I won't say that we solved all the issues. We evolved a lot. We are we are already seeing sometimes of improvement. Clearly, we're going to have some year on year growth in the fourth quarter, but what we are expecting is that the 3rd quarter, this 3rd quarter that we already closed should be the peak in absolute terms. This, you will see this in the next 4 quarters. This is also an opportunity going forward in 2020 for additional efficiency as Clifford mentioned. But again, it has a lot of process on our side. We have a big portion of our company helping on this side and we will continue to work. As I mentioned, we think that the 3rd order should be the best in absolute terms. Perfect. Very, very clear thing for you to think revenue. Excuse me. Our next question comes from Danielle Fader Liquidity Hi, good morning, everyone. My first question is regarding prices in the mobile segments. We have been seeing certain competitors increasing prices significantly over the past 2 quarters. My question is if that's an opportunity for team as well to implement more significant price increase in the coming quarters? And my second question, we see that the macro conditions have been challenging in the past 2 years. And my question is if the macro conditions indeed improve in the coming quarters, if that change in some way, the strategy of the company may be investing more to capture growth or focus more on the prepaid instead of the postpaid. So if something changed in the strategy overall, thank you. Thank you, Daniel. Related to the question. I have to remember that we were the first player starting from 2016 that every year breaks up our own customer base. We think and we believe also in an approach that is a kind of more for more approach also to reduce the reaction of the customer and the churn when this kind of event and after. And it will be part of our strategy, of our strategy and we will continue investing. Then with some different details related to our attempting back, I can't continue that this is an opportunity. I remember that we placed up our customer base last in the deal, sorry, in February. And we tried to expect our bills to be less than once per year. Related to the macro condition, it is important that Easter can do some advertising for our company. In our plan, We were forecasting the growth of 2.5 percent of GDP. And we are aligned with the guidance with the macro that reached only a growth of 0.8%. For sure, sign of improvement through their part and for sure that's mainly part of our customer base because we are used to talking about. Prepaid as a part of the segment that is impacted by the macro. But we have to remember that today, a good part of prepaid was negative to controller. So an improvement of the macro can help not only seen, but for the market on prepaid and on controller. Then it's important to further detail that going ahead prepaid is an important segment on which we have to further improve our capacity of goods intensive goods market because we see opportunity to be back, to grow open prepaid. It's not the case that the focus that we put in the last month allow us for the first time after a 36 month threat recharger that are best to grow compared to the past. Excuse me. Our next question comes from Susana Salara Itau. Hi, good morning. Thank you for taking our questions. If you could elaborate a bit more about your 2 new initiatives on the financial services and mobile advertising. That will be our first question. And just our second question is related to the registration with OIS when you guys expect it to make an impact in the P and L in terms of reduction, the OpEx of that's it guys. Thank you. Hi, Susana. Thank you for the question. Related to these new initiatives, For sure, in the presentation, the new planning will grow much more in detail, but just to give you a flavor about what we're talking about. Let me discuss about let me say advertising or digital advertising that we cannot there in 2 ways. 1 is as a publisher. We have a lot of access that we can exploit to some advertisers just to give you an idea. Every time the key of our prepaid customer and the recharge. They are directed to a portal to convince them to do a recharge. We can put on this portal. Some video that can be a sponsored 1 or can be an advertised Cemento. So we are starting to sell this kind of advertising. The second element we are working on and putting a lot of attention of the new on the news on privacy that will arrive in August. We have the capacity to do segmentation of our customer base that is very important and that we can start to act in the next year also as a GMP. So we can set the profiling of our customer base to improve mobile advertising from people that talk to buy advertisement. And then I don't have to say that as I repeat a lot of times, when there's someone that start doing is doing something better than us, we can cope it. I don't have to mention here the initiative of Vivo has that get in the past, they show good results in terms of revenue. And so we think that we can apply in the same way. Related to financial services, this is something we are working on and is another way to monetize our customer base. On this area, we are still working, so I cannot go too much in detail, but for sure, in the presentation, the new plan will give much more detail. But first, but I can assure you that we'll be very interested in initiatives. Perfect. Thank you. Hi, Roger. I'm sharing your second question was related to the NLU with Vivo. So center? Or Yes. I mean, when do you guys expect it to actually to be reflected with the P and L of team different sharing in terms of OpEx savings? Well, regarding OpEx, clearly something that we are still working and we're working a lot on both sides. You know that the MOU as related to 2 different initiatives, but it's the single weight of the 2G and then the single region cities below 30,000 in Additives. We still don't have the numbers. Clearly, there are significant impacts that we are analyzing that you probably will see this cost reduction starting in 2021, 2022. Why? Because if we manage to close, as we mentioned in the next, couple of months this contract. Probably 2020 will be the year that we will be working in order to to set industrial agreement. So, you should expect this impact 2021 and onwards. Okay, clear. Thank you. Excuse me. Our next question comes from Vanessa Soudeiro, Yes, guys. Good morning. Thanks for taking my question. The first one, Katie, you said during your presentation that the annual guidance for your reserve revenue is somewhat underrate. Just like to understand, where should this acceleration in mobile service should come from? And what you guys expect for the next year starting in the 1st Q? And our second question is just like to just a color from you guys on the AMX Nexa deal that you guys have requested, alongside with cardi due to would be part on your own part. Just to understand what you guys expect from that. And if you give the antitrust gives what you guys are asking, what's the potential impact for you? Thank you again. 1st of all, related to what the acceleration that could be in the fourth quarter to allow us to reach the guidance. As we told every time, The fourth quarter is always for a few of the operators team as always an important seasonality mainly complicated. And then one of the reasons for which usually in the fourth quarter, as you can see, every year, we posted also better result in terms of the delay. Why? Because there are more revenues compared to the previous quarter due to this seasonality. And we have also a better EBITDA So we see in this seasonality, the opportunity of the acceleration, and we look at that the number, the case number of October we are quite confident that we can able we are able to reach the target. But again, it's mainly related to the seasonality because always the second, as we stated also when we announced the result of the second quarter, in Brazil, looking at our numbers, the second, the seasonality that is much more important than the feedstock. Then related to the cloud and excel, to repeat the answer that I gave also to some journalists I'm a CEO of a company according to the Stock Exchange. If there is any movement that can change a way of the competition. We have also to look and evaluate if it can be sound in that change. The competition or not. So there's nothing specific. We enter in the card to have a best evaluation about how This is can change just the competition data feed. Okay. Thanks. Thanks for the answers. Excuse me. Our next question comes from Andre Badger, JP Morgan. So we are seeing, once again, OIcolepsy and we're having problems with her debts and possibly putting us for sales and the team was mentioning as one that would be in some of these assets. So just to clarify, I understand the obvious synergies of mobile of OA for September. But can you talk a little bit about all the assets that could be interested for kem in our view? About the I can start with the second without growth too much in detail. And again, I restated what I told saw this week during inventing Sao Paulo. For a mobile operator, access as spec the calling and backbone are always asset important to the quality of our network. We have the level of CapEx in our plan, that in an increased way means that we have to continue to build backbone, transport backbone, backhaul in the new antennas. So if at certain point, some of these assets could be available on sale on the market, It's our duty to evaluate. It is something related to our plan that can activate value. And this is not only related to oil because there are lots of discussion related to it, but this evolution that we are doing also related to the 3rd ge auction because there are other frequencies. The evaluation of the possibility to use other players that are being there other, let me say, essential companies that are building network that we can that can allow us to put further fab So this is something that we are doing on a daily basis. This is the huge job that LEO is a working government. And this is the thing that we did in the right way and in a clever way in the past. Last but not least, Sometimes we have to look to technology because all these technologies are black box in future at the right time, res technology. You can gain some competitive advantage for a certain amount of time. This is the case of Massimo is a technology that is coming from 3G that can be applied on the 4G and that can allow to improve the space and efficiency. I don't know if Leo wants to add more color on that. So you're completely right. Important to understand that that's how the client we are analyzing or is the better situation for existing assets. If it is buy or make it or lease or swap. So it is a continuous, let's say, work that we have, doing with the CFO. It's specifically, for the question, for Rory, you are right. The mobile is a clear, let's say, capacity, but they have a lot of fiber the way that they, probably, will take this available for the marketing can be different, not specifically by sale, what can be in a different way for capacity, rental swap, etcetera. So we are always analyzing all the opportunities. As Pieto mentioned, at the same time, we are seeing all the opportunity in terms of technology to improve our capacity using the existing assets. So Remember that we did the refarming repaid in 100 on the new cycle of the 4G. And now we are bringing to Brazil This new technology that is called the Massey's MIMO, what in the presales testing showed us that we can improve our capacity in 2, 3, 4 times using the existing spectrum. So it's very good because, let's say, it showed to us a near future in terms to achieve the currently capacity growth without for high densification upside. So This is our day by day, okay. Excuse me. Start 1. Excuse me. Our next question comes from Luiza Vivedo, Banco Safra. Good morning, everybody. I have two questions. First is regarding analyze any type of franchise that, for example, telephone economy is going to accelerate the deployment of fiber connections. And the second question is regarding the 5G. What do you expect to be the option in terms of timing and terms of, divestments and CapEx how do you see it right now? Thank you. Thank you, Luis. Moving to the first question, we are analyzing that we are analyzing the different model. We're going to approach the 3 family called Smart CapEx approach to continue to grow with team live, but among these approaches, there isn't something similar to the new one. Moving to the second question on 5G, we are very interested in understanding better the rules of this new technology work. The system don't have a clear understanding about the roots any kind of discussion makes no sense because it's quite difficult to say the level of capital requested, the kind of revenue that can we have. So as we mentioned, as we stated, again, we prefer to have something later with clear rules than something tomorrow with a clear room. Excuse me. Now we will move on to the questions received via webcast. Hi, everyone. This is Vincent Ferreira speaking. Our first question comes from Fernando Biodes from Mobile Times and we would like some clarification on what is the involuntary churn that we mentioned during our during the call and in our documents, if we can give further details on the initiatives that are being taken to reduce it, related to new margins of credit and improvements in our collecting systems. The second question, also something on the fiber is related to additional details of what is, the next team project related to artificial intelligence and customer caring. Please, Pietro. Okay. Related to the second question that is related to artificial intelligence on the customer care, what we are doing is that, let's try to simplify the concepts. Today, when you interact with an IVR that is the answering machine, we have only option. We are is going to propose to you. If you are calling for the issue 1, issue 2, issue 3, issue 4. With the artificial intelligence jointly with the speech recognition system, we are able to allow to the customer to speak in a natural way with our technology and we're able to understand which is the issue, and we are able to answer, you know, automatically also to the issue. Keep in mind that today already improving our capacity to understand all these elements, we are able to increase by 5 percentage points the number of calls that you are answering on the call center to an automatic system. So at setting in terms of attendant cost. This is just one of the parts of the win which we are going to use the acquisition entree. But perhaps the level of details needs to have a specific session to discuss that. And so we are ready to discuss and show to you all these details. Related about inventory sharing. Again, we mentioned in the presentation that 3 area on which we are working at our. The first one is more to prevent the acquisition of customer that have an higher level of risk in terms of the payment. Alvest improving our level of database to recognize the customer that have an higher level of risk. At the same time, and at this point of the presentation that we show is to act in a better way to recover money when a customer doesn't pay. So these are 2 of the 3 area on which we are working. The last one that was the billing For sure, it's much important also to have a system that is able to build the customer in the right data to deliver to the customer, the bill is happening when this direct moment. As we mentioned before, in this area, we had issue And at the beginning of the year, these are high on which we have already worked on and we are improving the And this is the reason for which we expect to have an improvement in the last quarter of the year. The next question coming from our platform is from Ana Palo Alto, from congenital digital. NCS, about how team can accelerate the migration of the 50,000,000 devices that are still 2G and 3G technology. What is team strategy. Okay. I think that is we don't have a silver bullet to do everything that we want. The activity that with our team, we are putting in place are several. First of all, as we mentioned, next best section as a platform. Every time that a customer that has 2G originators call our call center, while we do not propose to our customer to migrate to 4G explaining the advantage. Every time that the customer with a 2 or 3G handsets come in our shop, why we do not propose to do that. So compared to the past, our system in the past at some difficulties to allow to all our attendance to have visibility of which was the answer that the customer had in events. Today, with this next batch of platforms jointly with an increased level of segmentation, And we are able to have a more, nicer approach of all discussed. Just to compliment Pietro, we have to remember that, since 2 years ago, that we are not sale more 3g2g devices in our store. What it means that our focus is to provide the customer with the better technology for on our own store and our partners. So I guess that there is one of the parts of Delta help us to speed up so much our use days in terms of 4G. I'm so sure then there are some details that we cannot disclose because it's an we are going to be finding it to the competition our marketing plan. Ladies and gentlemen, without any more questions, I am returning to Mr. Pietro Labriola for his final remarks. Please, Mr. Pietro, you may proceed. I want to reiterate what they've been saying in the past month. Tim Brazil has a strong fundamentals and we are preparing ourselves its full advantage of the economic recovery and the protagonist in the future development in the Brazilian market. This market is not too easy, but keep setting potential, requiring focus and consistency. To close the year strong and achieve all our growth, we will lead 17 execution and economic progress to continue. And we are optimistic that both will be present in the 4th quarter. I want to remark the professionalism and dedication of our team to continue to make the difference to deliver those solid results. Thank you once again for participating in our conference call. Have a great day and I hope we can meet you. This does conclude the 3rd quarter of 2019 conference call of TIM Participacoes. Your line can be disconnected from now on. For further information and sales of the company, please access our website, ri. Team.com. Br. Thank you.